Buy-out is the only option for P3 schools in Nova Scotia, says think tank

June 14, 2016

HALIFAX – The P3 schools program in Nova Scotia was a failure that cost Nova Scotians tens of millions more than the traditional procurement system, says a study released today by the Canadian Centre for Policy Alternatives-Nova Scotia (CCPA-NS).

The study evaluates the province’s P3 schools program and finds there was a lack of evidence-based decision-making; no kind of cost-benefit analysis was done prior to the initiation of the projects, or at any time since. In addition, there were several examples of mismanagement of the program, ranging from a lack of oversight by the province to safety violations that placed students at risk.

“Nova Scotians have been locked into deals that will cost us at least $1 billion, we should have the assets to show for that investment. Schools are critical resources in our communities and they need to belong to the public, not private corporations,” says Christine Saulnier, CCPA’s Nova Scotia Director and a contributing researcher to this report.

There were no proven evidence-based advantages to using P3s, and clear disadvantages emerged:

These P3 contracts didn’t bring new private money to build this infrastructure, rather they just delivered it in a more expensive form.

The contracts didn’t help governments avoid public debt, they shifted it.

Risk transfer as a key advantage to using P3s was oversold and under-delivered.

The challenges of project management are more complex under P3s.

The first decision date regarding the 39 P3 schools is coming up in the next few weeks. The study finds purchasing the schools is the best option for the province.

“The extent to which public money has been used to help maximize profit for private developers will never be known, but what we do know is enough to justify ending the contracts and opting for the discounted price available only now on all of the schools. It is the only option that is in the public interest,” says Saulnier.

“P3 contracts are by their nature undemocratic - commercial confidentiality and the protection of a private corporation’s private interests are convenient political tools used to trump the public interest. The lack of transparency and accountability points to the need to improve on those points across government decision-making. However, this democratic concern coupled with high cost signals that our government should not actually enter into these kind of agreements for schools or indeed, other public infrastructure again.”